How to Create Value
New Perspectives on the Modern Corporation series
Chapter 4: Identifying the opportunities for successful M & As
Growth through M & A can assume different patterns according to the direction of the expansion to be carried out: horizontal, vertical or diversified. The specific growth pattern that a firm should follow, in order to create value, depends on the characteristics of its business system and the external environment, in particular the structure of the industry and its dynamics. Therefore, it is necessary, on one hand, to analyse in depth the structure of firms involved in the merger, for discovering which activities and resources can offer the best opportunities for successful M & As. On the other hand, it is very important to analyse the structure and the dynamics of the industry where the firm wants to expand its activities, so as to properly understand opportunities and risks.
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